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City finance officials present 5-year forecast showing revenue volatility and rising pension costs
Summary
Finance staff told the Carmel-by-the-Sea City Council that tourism- and construction-related revenues are volatile, operating costs (notably pensions) are rising, and the city risks operating deficits in later years unless the council adopts revenue, expenditure or financing measures.
Finance Manager Jamie Fields presented a five‑year strategic financial forecast and told the council the model is a planning tool, not a precise prediction. “The forecast is a tool,” Fields said, adding it is “a kind of a stress test” to highlight vulnerabilities and help the council make decisions ahead of the budget cycle.
Fields and council members identified three primary pressures: potentially declining tourism-related transient occupancy tax (TOT) and sales taxes as room demand and local construction slow; rising operating costs driven by salaries, benefits and negotiated wage increases; and significantly increasing employer contributions to CalPERS (the city’s pension system). Fields…
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